Many firms b. That is, the large firm acts independently. Which of the following is not a characteristic of oligopoly? C) is; to cheat regardless of the other firm's choice Either way, Id like to hear from you. b) Affect profits without influencing the profits of rival firms Its main characteristics are discussed as follows: 1. Marilyn has been involved in negotiations between DTR and prospective lenders as DTR Monopolists are not allocatively efficient, because they do not produce at the quantity where P = MC. C) a firm in monopolistic competition. It determines the law of demand i.e. Each firm is so large that its actions affect market conditions. (Pure) Monopoly 3. In the scenario above, the market is. A) zero economic profits in the long-run. E) none of the above is done. Price collusion caused by market transparency and other factors enables oligopolists to raise their barriers to market entry for new competitors, such as high capital requirements, legal obligations, and consumer loyalty. d) They do not achieve allocative efficiency because their price exceeds marginal cost. c) It will always be kinked because it is a price maker. A)Each firm faces a downward -sloping demand curve. e) It could be downward sloping or kinked. 4. b) its rivals match a price cut but ignore a price increase C. The choices made by one firm have a significant effect on other firms. Oligopolists in an oligopolisticmarket structure agree not to raise their prices but match only price cuts to avoid price rigidity. While AI integration in the medical, legal, and financial sectorsFinancial SectorsThe financial sector refers to businesses, firms, banks, and institutions providing financial services and supporting the economy. d) can set its price and output to maximize profits. 5. (Enter one word for each blank. b) They try to avoid losses by raising prices in conjunction with rival firms. c) The supply curve model they set up a 1 meter (100 cm) track. A small number of sellers. D) payoffs 2003-2023 Chegg Inc. All rights reserved. La renta de la tierra de primera calidad ser siempre superior a la renta de la tierra de segunda categora. Firms are more likely to cheat on a collusive agreement when the economy is experiencing a _____ (Enter one word). c) losses; prices; increase, What is it called when a group of producers creates a formal written agreement stating the level of output by each firm and the prices that must be charged? b) OPEC b) through pricing B) raise the price of their products. b) By increasing recruiting expenses Oligopolyis a market structure An oligopolistic market exhibits the followingoligopoly features: It raises barriers for new entrants to enter into the respective sector. 0) If the efficient scale of production only allows three firms to supply a market, the market is a. B) total revenue. *world trade a) Kinked-demand curve model The equilibrium ________ a dominant strategy equilibrium because the strategy in this game is for a firm ________. Even though the products of companies A and B are similar, there must be something that distinguishes them. d) achieve greater allocative efficiency but lesser productive efficiency, c) give the appearance of increased competition D) unit elastic demand. d) Firms choose strategies at the same time. Though, it is rare to find pure oligopoly situation, yet, cement, steel, aluminum and chemicals producing industries approach pure oligopoly. Consequently, the output and pricing policies of a particular company can affect market conditions. A) there are fewer than 6 firms in a market b) The Herfindahl model Product differentiation refers to making a product look attractive and different from other products in the same class. The incomes of each optometrist, in thousands of dollars, are given in the payoff matrix above. 9) If the efficient scale of production only allows three firms to supply a market, the market is a, 10) A cartel is a group of firms that agree to. Based on the payoff matrix, if the two firms agreed to both follow national strategies there is an incentive for them to cheat. b) They achieve productive efficiency because their marginal revenue equals marginal cost. Answers: 1 Show answers Another question on Social Studies. Mr. mann's science students were experimenting with speed. As in an oligopoly market, the decision of one firm influences the process and working of another firm. Marginal revenue = Change in total revenue/Change in quantity sold. E) an oligopoly. D) the industry is government regulated a) The outcomes for all firms are negative. 5) According to the kinked demand curve theory of oligopoly, each firm believes that if it raises its price, It is used as one of the strategies to increase the business firm's revenue and increase the market share. Due to minimal competition, each of them influences the rest through their actions and decisions. 30.331.934.432.831.132.230.736.830.530.634.533.130.131.030.730.930.730.230.637.931.131.134.630.233.132.130.631.530.230.330.930.031.630.234.434.230.230.131.434.133.732.732.432.831.030.733.435.730.730.4. A type of implicit understanding used by oligopolists to coordinate prices without engaging in outright collusion is known as ______. E) Each firm has an incentive to cheat. The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. d) cheat, Which of the following represent shortcomings of the four-firm concentration ratio? A) in a single-play game or a repeated game. ENGL1190_V0854_2023WI_Communications23.docx. *speeding up technological progress C) assumes that marginal revenue equals marginal cost only at the quantity at the "kink." The control of oligopolists over specialized inputs, such as resources, price, and production, makes it difficult for a new firm to survive. In a monopoly, only one big brand influences the entire market without any competition. A game that is played more than once between rivals is a ____ (Enter one word) game. An oligopolistic firm's marginal revenue curve is made up of two segments if ______. D) increase the amount they produce. Keep its price constant and thus increase its market share B. at least $10 million. C) there are numerous producers of two goods competing in a competitive market A. firms have no control over their price B. firms may sell a differentiated product C. firms have market power D. firms may sell a standardized product E. the market contains a few large products A, C In an oligopolistic market, the two types of retaliation include. E 12) Because an oligopoly has a small number of firms A) each firm can act like a monopoly. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. It thus limits the competition to only those already in the group. Two different industries can have the same the four-firm concentration ratio, yet the amount of monopoly power of each of the firms in the two industries can be drastically different. b) product development and advertising are relatively difficult to copy b) it will lower the firm's costs However, at this price profit of firm B is not maximized. B) assumes marginal cost is constant. E) unknown. B) 1. E) downward-sloping demand curve with no kink. 2. It is an essential component of marketing strategy leading to brand recognition and business growth. Marketers highlight the distinguishing features in the product commonly through packaging or a good design, which helps communicate the benefitting factors to the shoppers.read more. B) collusion Marginal cost formula helps in calculating the value of increase or decrease of the total production cost of the company during the period under consideration if there is a change in output by one extra unit. We unlock the potential of millions of people worldwide. While it is true that strategic behavior and mutual interdependence characterize oligopolies, this is not the reason why they are price makers. A) each firm can act like a monopoly. D) the four-firm concentration ratio for the industry is small. always one step ahead. They do so through collusion that results in higher prices and fewer production or product choices for customers. A Computer Science portal for geeks. B) perfectly inelastic demand. Any change in either of them will affect the quantity/output sold by a producer. *Increase profits 26) Refer to Table 15.3.4. A) "I am producing extra widgets, even though it costs me short-run profits, to stop Wally's Widgets from expanding into my market." *It eliminates competition among firms. d) The same as a monopoly, By controlling ______ through collusion, oligopolists may be able to reduce ______, ______ profits and block the entry of new rivals. Economics questions and answers. $6. Impure oligopoly - have a differentiated product. Economists identify four types of market structures: (1) perfect competition, (2) pure monopoly, (3) monopolistic competition, and (4) oligopoly. 11) Once a cartel determines the profit-maximizing price, c) regulated monopoly A) potential entrants entering and making monopoly profit. After each player chooses his or her best strategy and sees the result, The study of how people behave in strategic situations is called _____ theory. Oligopoly is a market structure characterized by a few firms. believes that DTRs debt to equity ratio of 1.6 is probably the minimum that lenders will accept. The concentration ratio measures the market share of the. Established firms in the market may take strategic actions to prevent new entries. What are examples of monopoly and oligopoly? a) kinked and steep single family housing and would be an attractive site for single family homes. They may produce homogeneous products or differentiated products. A) a natural monopoly. C) the HHI for the industry is small. The land is in an area zoned only for $1. Which of the following is characteristic of oligopoly, but not of monopolistic competition? Welcome to EconTips, your number one source for all things about economics. What are the four characteristics of market structure? D) a prisoner has no incentive to confess to his crime, and stands a greater chance of not going to prison. C) the same as a monopoly. C) 2. C) other firms will raise their prices by an identical amount. 14) A duopoly occurs when ________. *The game would temporarily move to either cell B or cell C. A cartel is a group of producers of goods or suppliers of services formed through an agreement amongst themselves to regulate the supply of goods or services with the basic intent to illegally regulate the prices or restrict competition regarding the said goods or services. The number of suppliers in a market defines the market structure. If Marilyn believes that the $10 million stock issue was undertaken only to improve DTRs e) Its marginal cost curve is made up of two segments, d) Its marginal revenue curve would consist of two segments. Oligopolistic firms do which of the following when they change their pricing strategies? B) marginal cost curve is discontinuous. Each firm is so large that its actions affect market conditions. a market structure characterized by a small number of interdependent sellers is called a oligopoly Which of the following is NOT a common characteristic of oligopoly? *The game would eventually end in the Nash equilibrium (cell A). Production Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. D) Bud has a dominant strategy but Miller does not. However, firm B will follow the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. E) equilibrium price and quantity will be insensitive to small demand changes. But in practice, there are several barriers to entre which make it quite difficult for the new firms to join the industry or market. An example of a pure oligopoly would be the steel industry, which has only a few producers but who produce exactly the same product. A) oligopolists. D) is not; to comply when the other firm complies and to cheat when the other firm cheats *Ownership and control of raw materials The value denotesthe marginalrevenue gained. 11) Because an oligopoly has a small number of firms, A) each firm can act like a monopoly. . 13) Complete the following sentence. B) the courts. A) a firm in an oligopoly market. An oligopoly exists when a market is dominated by a small number of suppliers or firms. 5) Which one of the following is not a feature common to all games? D) There is more than one firm in the industry. d) its rivals match both a price cut and price increase, b) its rivals match a price cut but ignore a price increase, When members of an oligopoly meet to set prices to maximize profits it demonstrates the ______ and/or the ______ model. Because of this, every firm takes decisions very carefully by considering the possible reactions of the rival firms. *The game would eventually end in either cell B or cell C. E) All of the above. A. E) cheat on each other. They believe in making customers stick to their brands for core competenciesCore CompetenciesThe core competencies in business refer to its resources and unique fundamental capabilities that distinguish it from market competitors. b) Firms may sell a homogeneous product. E) None of the above. Pure because the only source of market power is lack of competition. A) a market where three dominant firms collude to decide the profit-maximizing price. d) their profits and sales will rise. However, the cartel system is fragile and considered illegal in many parts of the world as it includes increased technical and quality standards, mutually agreed pricing or price-fixingPrice-fixingPrice fixing is an agreement between business competitors to increase (very often), reduce (perhaps for a short time), establish, or stabilize (rarely) prices, disregarding the prices governed by the market's flow of demand and supply.read more, etc. C) specify how marginal cost is determined. a) major firms in an industry ranked by employment 3) Which one the following industries is the best example of an oligopoly? C) Trick cheats, while Gear complies with the agreement. *To decrease monopoly power C) the firms keep profits and prices so low that no rivals are . Which of the following represents the problem with the four-firm concentration ratio? Course Hero is not sponsored or endorsed by any college or university. a) pricing theory $4. Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. In third-degree price discrimination happens when customers are segregated by . C) if Jane does not change her decision, Bob would like to change his. In short,AI oligopoly is all set to shape the market, comprising a few large AI service providers dominating and influencing others in the business. However, at this price profit of firm B is not maximized.The profit-maximizing price of firm B isPB (>PA) and the quantity is Xbe (cocomelon cake design for boy,